How does the author develop the characters in this short story excerpt?

physical description, behavior, insight into the character's thought processes through dialogue or narration, and insight through the opinions of other characters in a story.

Explanation:

If a characters dialogue is timid then you know this character is a shy person, if the character has bright hair and a different style than most you know the character is bold (physical description), if the character often thinks rude things towards other people they are probably mean, and etc